Will Coca-Cola Finally Make This Monster Investment?

shutterstock_494760727.jpg

The beverage mogul Coca-Cola may be on a verge of a monster deal­– in two ways than one.

The soda company already owns 16.7% of the energy drink brand Monster and it looks like it is the right time to buy beverage company.

With the favorable market conditions, an industry banker told the publication “The Deal” that an acquisition "would be the logical next step for both companies."

Considering there aren’t many other companies in the position to invest in a beverage company of Monster’s size, Coca-Cola is one of the most logical suitors.

Coca-Cola has a massive market cap of 195.22 billion, while Monster is at $31.86 billion. PepsiCo is another potential suitor, but it’s much more unlikely since Coca-Cola has already had a head start. Just a few years ago, Coca-Cola purchased a 16.7% stake of Monster.

"It seems Monster has made its bed and decided Coca-Cola is the way to go," said “The Deal’s” mysterious source.

Another reason why Monster may be looking to sell is that its most of its management team is over the age of 60, meaning they are about ready to retire.

Not to mention, two of the oldest directors held executive positions at Coca-Cola Bottling Company of Los Angeles back in the 70s’ and 80’s. While several others on the board also have Coca-Cola connections.

James Quincey, Coca-Cola’s CEO said that the company has aggressive growth plans and will be "very focused on expanding in other categories that are attractive to us” back in April. 

Do you think it’s only a matter of time before Coca-Cola acquires Monster? Then what will Pepsi’s, which has a market share that is 30 billion less than Coca-Cola’s, next move be?

Read more